SPC affirms Nippon Steel patent in landmark ruling

In a landmark decision, the Supreme People's Court (SPC) of China has overturned a lower court's ruling and upheld the validity of a patent owned by Nippon Steel Corporation (Nippon Steel). The patent was challenged by Baoshan Iron & Steel Co., Ltd (Baosteel).

The ruling was made public through China Judgements Online, a leading platform for accessing judgments and decisions from Chinese courts.

The patent in question is titled "Method for Hot Pressing High-Strength Components Using Steel Plates and Hot-Pressed Components" and carries the Chinese patent number ZL200580023694.X.

Initially, Baosteel contested the patent's validity at the China National Intellectual Property Administration (CNIPA), which upheld its validity in June 2019.

Dissatisfied with this decision, Baosteel pursued an administrative lawsuit with the Beijing Intellectual Property Court, arguing that the patent claims lacked essential technical features and were not adequately supported by the specification. Specifically, Baosteel claimed that the absence of a "clearance feature" in the claims prevented the resolution of the "hydrogen embrittlement" issue, and that the claims encompassed an overly broad protection scope.

On August 26, 2022, the Beijing Intellectual Property Court accepted Baosteel’s argument and overturned the CNIPA's decision.

Subsequently, Nippon Steel appealed to the SPC, arguing that the "clearance feature" in the patent claims was based on common knowledge in the field.

On October 24, 2023, the SPC issued a second-instance administrative judgment reversing the Beijing Intellectual Property Court's decision and validating the patent.

The SPC clarified two key points in the judgment regarding claim support and essential technical features. It emphasized the importance of considering the entirety of the specification and common knowledge in the field.

Following detailed analysis, the SPC concluded that the "clearance feature" was indeed common knowledge and that the claims were supported by the specification.

This particular patent is likely one of three patents that Nippon Steel filed against Baosteel. In October 2021, Nippon Steel initiated legal action against Toyota and Baosteel for patent infringement concerning the use of non-oriented electrical steel plates in electric vehicles.

Baosteel confirmed this information in a statement released on August 17, 2022, noting that Nippon Steel had filed three lawsuits against the company, seeking over 20.4 billion yen in total.

As China currently dominates the global steel production, accounting for approximately half of the world's annual steel output, it has increasingly become a preferred location for global steel giants to file lawsuits, said Chinese IP analysts.

The fair and transparent handling of this case by the SPC not only enhances China's judicial reputation internationally but also encourages more steel companies to seek protection in China. This strengthens China's position in the global steel industry, fostering innovation and upgrading in the sector.